Debt consolidation via mortgages is dangerous has warned that home owners could slip further into the red by consolidating debts through their mortgages.

Recent research from Credit Action shows the UK’s debt mountain grows by 1m every four minutes. says home owners looking to transfer debts racked up on credit cards, bank loans and overdrafts to their mortgages could end up doubling their debts.

The personal finance data analyst says personal loans could be cheaper in the long term, as they see interest paid over a shorter period of time. Mortgages see borrowers paying interest for longer periods, typically 25 years.

Richard Brown, chief executive at, says: “Monthly repayments of 300 for personal loans of 15,000 over five years may seem expensive when compared with monthly repayments of just over 100 if consolidated into 25-year mortgages. But in the long run mortgages will prove to be more expensive.”

He estimates that if consolidated into mortgages, original debts of 15,000 could spiral to over 33,000 when interest is factored in.

This compares unfavourably with personal loans for the same amount, which would add up to 17,500.

Brown adds: “Consolidating debt into mortgages means that consumers are likely to end up paying nearly twice as much.”

Andrew Montlake, partner at Co-balt Capital, says: “As property prices have increased over the past few years, there are many people who think that remortgaging and consolidating their debts using the equity they’ve built up in their homes will get them out of the hole they’ve dug for themselves.

“But there are dangers using equi-ty that could disappear if house prices fall.”

He adds: “However, with sensible advice and planning, this method can be used to get certain people out of immediate trouble.”